Sears building in Boyle Heights sells to developer for $29 million

Roger Vincent

A vast but vacant Sears Roebuck & Co. product distribution center in Boyle Heights — a landmark in East Los Angeles since the 1920s — has sold for $29 million to a Los Angeles developer who plans to bring it back to life, perhaps with housing, offices and stores.

The sprawling building on Olympic Boulevard near the Los Angeles River is a familiar fixture on the skyline for commuters heading west into downtown.

Izek Shomof, who has renovated several office buildings and hotels in downtown's historic core, bought the sprawling nine-story complex where sure-footed Sears workers once glided on roller skates among far-flung racks of merchandise to fill orders from the popular Sears mail-order catalog.

"I am excited to breathe new life into this long-neglected building," he said.

The seller was another downtown developer, Mark Weinstein, who acquired the 1.8 million-square-foot property nearly a decade ago, but was unable to get his own planned mixed-use project there underway.

The property is big enough to support a range of uses in the years ahead, Los Angeles real estate consultant and historian Greg Fischer said.

"You can actually create your own neighborhood in that space because there is nothing in there people are so wedded to that they would be sorry to see it go," Fischer said.

The building was one of nine mail-order fulfillment centers that Sears built from 1910 to the onset of the Great Depression. Its nearest counterpart, in Seattle, has been converted to a retail, office, warehouse and manufacturing center. The Sears warehouse in Boston also has been transformed into a commercial center.

The Boyle Heights building, completed in phases starting in 1927, attracted more than 100,000 curious visitors in its first month of operation, The Times reported that year. That didn't include shoppers at the company department store on the first floor.

Sears employees filled mail orders by roller skating around the 200,000-square-foot floors picking up items and dropping them onto corkscrew slides for distribution by truck or rail.

The Sears department store on the first floor is still in operation, but the catalog center closed in 1992 and the property was sold as part of a cost-cutting program. That left a hole in the neighborhood around Olympic and Soto Street, where the Sears complex employed more than 1,000 workers at the time it closed.

The illuminated Sears sign atop a 14-story tower above the building was a beacon for Eastsiders returning home on area freeways for decades. The property is listed on the National Register of Historic Places.

Weinstein, the seller, had a personal connection to the building — his great-grandparents and grandparents lived in Boyle Heights and took him to Sears as a child. He hadhoped to enhance the neighborhood with a center where residents could eat, shop and perhaps watch a movie.

His wide-ranging plans called for 480 condominiums, 180 apartments and 750,000 square feet of stores and restaurants laid out on streets that would pass through the 23-acre property. The ground floor was to house stores including Sears. The next two floors would have included commercial space and possibly a charter school and parking.

The remaining floors would have apartments facing the downtown skyline and more parking. On the roof would be a garden, tennis courts, a swimming pool and other amenities for tenants.

Such an ambitious development was too complicated and would take too long, Weinstein decided. In 2007, legendary Los Angeles boxer Oscar De La Hoya and partners tentatively agreed to buy the property from Weinstein's MJW Investments for about $70 million.

The deal fell apart in early 2008 as the nation's economy contracted. Weinstein is now focused on investing in student housing in Santa Barbara, Oregon and Utah.

Shomof, the new owner, called the Sears acquisition "a very exciting, huge project" and said that he is exploring ideas for how to transform the property. He expects to add stores on the ground floor and is "looking toward" residential uses upstairs. But he said he may also incorporate offices.

His company is already cleaning up the site and will repair broken windows and paint the exterior within the next few months, he said. He would like to see new tenants join Sears within 18 months and the makeover completed in about three years.

"I am hopeful that the final plan, when revealed, will generate positive feedback from the community and its residents," Shomof said.

The notion of including offices at the site would have sounded far-fetched a decade ago, but in the nearby arts district across the Los Angeles River a growing number of firms in creative businesses are spending top dollar to rent space in old industrial buildings for use as offices.

Buildings in another large former 20th century industrial complex on Alameda Street now known as Alameda Square are being converted to offices. VF Corp., one of the world's largest apparel companies, recently moved the headquarters of its Splendid and Ella Moss clothing lines there.

Such activity demonstrates that the creative office market evolving downtown is moving east, said real estate broker Brendan McArthur of Jones Lang LaSalle, who represented the seller in the Sears transaction.

The Boyle Heights area could also use more stores, he said.

"The area is very retail starved, especially for the big-box retail," McArthur said. "The Sears store does very well and we had a lot of interest from other retailers who want to locate on the property."

The floors are so large, at 200,000 square feet — about the size of a Home Depot store — that it could be a challenge to carve them up into offices or residences. It would be possible to put residences around the windowed perimeter and allow residents to drive up ramps inside and park next to their units, McArthur said.

Turning the building into a thriving mixed-use center will require a lot of time and money, said Fischer, the consultant, but the Sears complex has character and history working in its favor.

"People are looking for something that doesn't bore them to death," he said. "Sears has good bones. It simply needs to be updated."